-- you'll find Magnus's journal, which makes for interesting reading. When you get to the end, you'll find a sort of wordsearch puzzle with a stencil. Read to the end of this hint for the completed puzzle.
This isn't a standard wordsearch, actually. The words are only horizontal or vertical, not diagonal, and the letters are all jumbled up, not in the right order. Feh. (Incidentally, if you want to know what all these words mean, complete the sails display in the Culture Center to see the definitions.
To make a word in a row, left-click on the letters you want to use (they turn red). To make a word in a column, right-click on those letters (which turn blue).
It helps that there's only one word in each row and one in each column. This makes it easier to find the long words like "jackstay" -- there aren't that many rows or columns that include c, j, k, and y.
For the shorter words, it's more of a problem. It's also tough when a row has two As, for example, and you only need one. Which one do you choose? The only way to find out is to make the words in those columns and see which ones you need. Nasty!
When you finish making a word, it will disappear from the word list. Be aware, however, that this doesn't necessarily mean you've made that word correctly or in the right place.
If you're hopelessly tangled, here's the solution: